CANNES, France — No need for dreaming here. Each Cannes Film Festival generates its own metaphors for a 10-day regimen of visions in the dark. It's impossible to forget, let alone transcend, one's unnatural situation here.

The opening film of Cannes' 2008 edition clobbered participants with a cautionary allegory. Regardez: The civilized world suffers a mass loss of sight in Brazilian director Fernando Meirelles' apocalyptic Blindness, an over-directed, under-conceptualized international hodgepodge adapted by Canadian hyphenate Don McKellar from the unadaptable 1998 novel by Portugal's Nobel laureate, José Saramago. For all Blindness' insistence on the primacy of the visual, critics were not pleased.

We see, therefore we are. Watching a stolid horde of blue-clad factory workers trudge obediently up an institutional staircase in Jia Zhangke's 24 City as though to the next movie, the colleague beside me murmured: "It's Cannes!"

Brilliante Mendoza's Service, a purposefully abrasive family melodrama set in a Manila movie palace given over to porn and prostitution (and itself a hardcore feature), provided a more amusingly sordid — and widely reviled — sense of the cinematic life. Best of all has been Arnaud Desplechin's A Christmas Tale, in which a dysfunctional clan regroups for the holidays to celebrate their ailing matriarch — spirit of cinema Catherine Deneuve — and, among many other things, watch The Ten Commandments on TV. (It's Cannes!)

The weak dollar has evidently thinned the number of American buyers this year, but the 10-day festival remains devoted as ever to high-end American goods, with the official section featuring a resurrected Indiana Jones, the latest from Woody Allen (Vicky Cristina Barcelona), and a new film from Clint Eastwood (Changeling), overdue for his Palm d'Oronation. But, as befits the 40th anniversary of the demonstrations that shut down Cannes in May '68 and a jury chaired by Sean Penn, it's been a serious festival.

At an opening press conference, President Penn called upon the world's filmmakers to show the world as it is: "We will be careful to make directors conscious of the times in which they live." Indeed, and as if anticipating this injunction, the competition that Penn will judge has been heavy on sites of social conflict: Argentine prisons, Brazilian barrios, Chinese factories, Italy's mob-ruled slums. Even A Christmas Tale is predicated on illness, death, and medical technology.

Steven Soderbergh's two-part celebration of Che Guevara has yet to screen, but there have already been two innovative, powerful moral essays, the Israeli "animated documentary" Waltz With Bashir, shown in competition, and British video-installation artist Steve McQueen's first feature, Hunger, which opened the sidebar "Un Certain Regard."

Ari Folman, whose magic realist Saint Clara was one of the outstanding (and least likely) Israeli films of the 1990s, has created a grim, deeply personal phantasmagoria of his experiences during the 1982 invasion of Lebanon — basing his animation on a series of interviews with former comrades, mixing dreams with incomplete or conflicting memories.

Made with an intentional lack of resolution, Waltz With Bashir builds to the massacres at the Sabra and Shatila refugee camps, an atrocity which the Israeli army enabled but didn't commit. The mood, abetted by Max Richter's brooding martial score, is dark, although the thick-lined, near-monochromatic animation is increasingly bathed in an eerie yellow light. When Folman abruptly goes to news footage, it's to break the subjective spell with the TV images that serve as public memory.

If Waltz With Bashir seems specifically Jewish in its concern for the burdens of history, interpretation of dreams, and the nature of individual responsibility, Hunger — which depicts the imprisoned IRA member Bobby Sands' 1981 hunger strike — is an audaciously Catholic film. Sands is shown as an explicitly religious martyr, and even the British cops are into a form of subtle self-mortification.

Midway through the madness, it's been a good but not yet great festival. As is customary, however, the competition has been back-loaded with films by Lucrecia Martel (The Headless Woman), Philippe Garrel (Frontier of Dawn), and Atom Egoyan (Adoration) — not to mention Eastwood, Soderbergh, and Charlie Kaufman's directorial debut, Synecdoche, New York, yet to screen.

The competition's major disappointment thus far: Turkish festival star Nuri Bilge Ceylan's Three Monkeys. An impeccably crafted, ambitiously schematic, distressingly empty melodrama, Three Monkeys strains to make a statement about this corrupt world, but lacks the rueful subtleties of Ceylan's earlier features. Less of a comedown, the Dardenne brothers' latest moral dilemma, Lorna's Silence, is lumbered by a choppy screenplay and inexpressive central performance. Still, in addition to Waltz With Bashir, there have been two competition standouts.

More obviously documentary than most of his fiction films, Jia's 24 City is an ambivalent exercise in Communist nostalgia so meaningfully framed that it could have been shot by Andy Warhol or Chantal Akerman. The movie is set largely in a giant factory slated for destruction (or, more precisely, urban renewal) and populated mainly by retired workers, playing themselves, as the (barely living) monuments of Mao's China.

As with Jia's other movies, this subversively old-fashioned hymn to production is filled with offbeat details (an elderly worker walking past the doomed plant holding her bag of IV fluid aloft like a torch of freedom) and punctuated with pop songs. The same could be said of Desplechin's expansive yet cozy Christmas Tale — a plum pudding of a movie, rich (perhaps too much so) with craziness, melodrama, and cinematic brio.

As convoluted as it is superbly acted, Desplechin's ensemble piece inevitably acknowledges Renoir's Rules of the Game. At once avant and retro, A Christmas Tale is the sort of Palm-friendly movie-movie Desplechin's admirers always thought he could contrive. It's a definite advance, but the comeback of the festival (or perhaps the century) belongs to 70-year-old Jerzy Skolimowski — making his first feature in 17 years and his first film in his native land since 1966.